Report: Toyota to end NUMMI partnership

July 23, 2009 7:04:12 PM PDT
Thousands of Bay Area jobs are on the line at California's only auto manufacturing plant, the New United Motor Manufacturing, Inc (NUMMI) facility in Fremont. Toyota is negotiating on a contract with the United Auto Workers Union, but the car company appears to be inclined to shut the place down.

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Reports have been swirling for months that the 4,700 workers might lose their jobs at the NUMMI plant. Thursday, a Japanese news agency reported Toyota has decided to liquidate the plant. Toyota responded saying there is no final decision, but the company is leaning in a direction. To a lot of folks trying to read the tea leaves, it does not look very good.

When General Motors went bankrupt it said it could no longer keep up its end of the joint venture with Toyota. Now with Toyota losing $4.4 billion last year, the Japanese car maker says it to may be on the brink of throwing in the towel.

In a statement Thursday, NUMMI said Toyota is leaning towards a decision, and Toyota said it regrettably must also seriously consider steps to dissolve the joint venture.

Workers leaving at the shift change Thursday afternoon say the rumors are flying.

"They're saying that we're shutting down, but it's only that we're negotiating with General Motors," said one worker.

"The company's not saying anything, the union's not saying anything," said another worker. "As far as I'm concerned, everything you guys are reporting is propaganda. The company wants us to give up wages so they're going to say whatever they have to, to scare people."

The United Auto Workers union is negotiating with Toyota. The contract us up in August. The mayor of Fremont, Bob Wasserman, says he is trying to remain optimistic, but the latest reports do make it sound like Toyota is thinking of closing.

"Yeah, if I had to go one way or the other, I would have to say that's the way they're leaning," said Wasserman.

There are 4,700 jobs at NUMMI, and in Hayward there arre another 400 jobs at a factory that produces door panels for NUMMI. The Injex Industries plant manager Ebi Mogharei says if NUMMI goes his company will fold.

"I got 400 people working here for us and our livelihood is directly tied in to NUMMI's run," said Mogharei. "[If NUMMI closes] we close. It's that simple."

And it's far more. An estimated 30,000 jobs in California are directly tied to the NUMMI plant. Lawmakers in Sacramento have assembled incentives including exempting NUMMI's equipment from sales taxes, reducing electricity costs by 70 percent over the next two years and requiring the state to purchase a set number of Tacoma pickups and Corolla compacts produced at the plant.

Assemblyman Alberto Torrico, D-Fremont, wants the federal government's help.

"What I'm asking our federal representatives from California to do is the following -- go to the car czar and say part of this bailout money for the car companies has to be there to pay off whatever GM owes NUMMI and Toyota," said Torrico.

The governor says he is continuing to work with all parties in order to try and ensure the future success of the plant, that it has an annual payroll of $500 million a year and is tied to many paychecks at companies that depend on NUMMI for their survival.

The future of the plant should be known in the next week to 10 days.

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